Supply chain fragility reshapes risk strategies as cyber and geopolitical threats escalate

Cybersecurity, geopolitical instability and executive oversight have emerged as the defining issues for supply chain resilience in 2025, according to new research from broker WTW.

The firm’s latest Global Supply Chain Risk Survey, based on responses from 1,000 senior decision-makers at companies with over $250m in revenue, shows a marked shift away from short-term disruptions and towards long-term strategic vulnerabilities.

“Supply chains are the backbone of any organizational ecosystem,” said Simon Sølvsten, head of organisational resilience research at the WTW Research Network.

“Their complex design, international reach, and broad exposure to risk present significant challenges for organizations in maintaining the necessary understanding and oversight of inherent risks crucial for building efficient organizational resilience, especially as they strive to keep pace with the evolving risk landscape.”

Cyber risks, in particular, have surged in prominence. The proportion of firms identifying cyber as a top concern jumped to 16% in 2025, up from just 5% in 2023. Meanwhile, 25% of respondents rated cyber risk as high and 21% as very high, with fewer than 2% saying the threat was low.

This reflects broader findings from WTW’s Emerging and Interconnected Risks Survey, which highlights rising cyberattacks as a systemic business threat.

WTW’s report warns that “the dramatic rise in concern underscores the increasing frequency and severity of cyber attacks, making businesses more aware of the importance of securing their digital operations.”

Pricing pressures

Hugo Wegbrans, head of corporate risk and broking for Europe at WTW, highlighted the difficulty of matching modern supply chain complexity with suitable insurance coverage.

“The complexity of modern supply chains presents a unique challenge for the insurance industry, where risks must be thoroughly understood and accurately quantified to enable effective diversification and appropriate premium pricing,” he said.

“Proper risk quantification is essential to ensure that premiums reflect actual exposures, enhancing acceptable risk profiling, competitiveness, and the overall appeal of the market.”

Contingent business interruption cover and broader non-damage BI solutions are increasingly under scrutiny, with the report noting limited availability and unpredictable loss patterns as obstacles for traditional risk transfer strategies.

Only 8% of surveyed firms felt they had complete control over supply chain risks. Despite this, 63% reported higher-than-expected losses, suggesting a persistent mismatch between perceived preparedness and real-world impact.

Boardroom urgency and strategic pivots

One of the starkest shifts in the 2025 data is the growing involvement of senior leadership. More than three-quarters (75%) of companies ranked a lack of board buy-in among their top three challenges to improving risk management, up from just 36% in 2023.

This mirrors a pivot from reactive to strategic planning. The share of firms taking a strategic approach — involving dual-sourcing, critical supplier assessment, and inventory planning — rose to 50% from 43% in 2023. Meanwhile, purely reactive strategies remain rare, with only 5% relying on crisis management alone.

Reputational risk now tops the list of feared impacts, cited by 66.5% of companies — a steep climb from 41% in 2023.

Damage to customer trust (65%) and long-term market share loss (49%) were also rated far higher than traditional short-term sales disruptions, suggesting a reframing of supply chain issues as existential rather than operational.

“Navigating these challenges is no small feat”

Supply chain mapping, digital transformation, and data availability were identified as the most promising areas for future investment. Nearly half (46%) of respondents said improved data was the biggest opportunity for supply chain risk management in 2025.

The number identifying digital transformation as a top-three priority also rose, from 31% to 41%.

These technology priorities signal a clear shift from reactive disruption response to forward-looking resilience. However, the report warns that “businesses are caught off-guard by the scale of disruptions” — with 52% saying losses exceeded expectations, and 10% reporting they were “much higher than expected.

Despite growing sophistication, fewer organisations are reporting transformational gains. Just 22% of firms said their investments had “greatly improved” resilience, down from 28% two years ago, reflecting the challenge of moving from tactical upgrades to systemic improvement.

WTW’s report outlines a supply chain risk environment that is more interconnected and less predictable than ever, urging a rethink of traditional insurance and operational strategies alike.

Sølvsten added: “Navigating these challenges is no small feat. Organizations must be proactively anticipating, mitigating and managing a growing range of potential disruptions.”